Illinois Paycheck Calculator & Income Tax Rates (2026)

Illinois taxes all taxable income at a single 4.95% rate. The only thing that changes your bill is the deduction that comes off the top first.

With a flat state rate the marginal state rate is constant, but the overall effective rate still rises because federal brackets are progressive.

Illinois's joint deduction are the same as single brackets, so the marriage effect here comes from the deduction and the federal side. On $100,000 a joint return keeps $80,042 versus $74,316 for a single filer.

Illinois taxes all income at a flat 4.95%, a rate set in July 2017 when the legislature raised it from 3.75% to end a two-year budget impasse. A single rate is not merely policy but constitutional: Article IX of the Illinois Constitution requires that any income tax be levied at a non-graduated rate, and voters rejected a 2020 amendment that would have permitted graduated brackets, 53% to 47%. Any move to a progressive tax would require another statewide vote. The 4.95% rate applies for tax year 2026, with no scheduled change. The tax base starts from federal adjusted gross income, and Illinois offers no standard deduction — only a per-person exemption a little under $3,000 — so nearly every dollar of wages is taxed. What Illinois does not tax is retirement income of any kind, an exemption broader than in almost any other state and one that has survived every budget crisis since it was enacted.

Illinois has no standard deduction and no itemized deductions; the only universal subtraction is a personal exemption a little under $3,000 per taxpayer and dependent, plus $1,000 for filers 65 or older or blind, and it disappears above $250,000 of adjusted gross income single or $500,000 joint. Credits carry the weight: a state earned income credit worth 20% of the federal credit, a child credit for EITC recipients with children under 12, a 5% credit for property taxes on a principal residence, and a K-12 education expense credit of up to $750.

Illinois has no local income taxes. The Illinois Constitution bars home-rule units, including Chicago, from taxing income, earnings or occupations without General Assembly authorization, and none has been granted. Chicago instead leans on the nation's highest big-city sales tax, a 9% amusement tax, and utility and parking taxes. Suburban Cook County and the collar counties add nothing to paychecks.

Illinois' state sales tax is 6.25%, and local layers push Chicago's combined rate to 10.25%, the highest of any major U.S. city; the statewide average is about 8.9%. The state's 1% tax on groceries was repealed effective January 1, 2026, but municipalities were allowed to impose their own 1% grocery tax in its place, and Chicago and hundreds of other cities did, so most residents see no change at checkout. Prescription drugs and medical devices are taxed at 1%.

Illinois has the second-highest property taxes in the nation behind New Jersey, with an effective rate around 2.1% of market value — a $300,000 home commonly owes $6,000 or more a year, and some Cook County suburbs exceed 3%. The general homestead exemption is $10,000 in Cook County and $6,000 elsewhere. A senior exemption ($8,000 in Cook County, $5,000 elsewhere) and a senior assessment freeze for households under $65,000 of income provide the main relief.

Illinois exempts every form of retirement income that is federally taxable: Social Security, private and public pensions, 401(k), 403(b) and 457 distributions, traditional IRA withdrawals, Roth conversions, military retirement, railroad retirement and most annuity income. It is one of only three states — with Mississippi and Pennsylvania — that draw the line this broadly, and the only one with a metro of Chicago's size. The exemption applies at any age, so a 45-year-old taking early 401(k) distributions or executing a large Roth conversion owes Illinois nothing on it. A retired couple with $150,000 of pension and IRA income plus Social Security pays zero state income tax; the same couple in Minnesota would owe roughly $7,500.

Retirees are Illinois' clearest winners: pensions, IRAs and Social Security are entirely untaxed. High W-2 earners do better than the 4.95% headline suggests next to Wisconsin (7.65% top) or Minnesota (9.85%), and there is no local tax in Chicago. Dual-income couples pay a flat rate with per-person exemptions, so marriage changes nothing. Remote workers owe 4.95% on all wages earned while living in Illinois; reciprocity with Iowa, Kentucky, Michigan and Wisconsin covers cross-border commuters. Homeowners lose: the property tax bill on a modest house often exceeds the state income tax.

The median household income in Illinois is $65,000, which is $51,331 a year ($4,278 a month) after all taxes. That is close to the national median. After adjusting for cost of living, the purchasing power of that take-home is equivalent to $55,195 in an average-cost area.

Illinois ranks #41 of 50 for raw take-home pay and #24 for cost-adjusted purchasing power at $100,000. The 17-place gap between the two reflects a below-average cost of living that boosts real purchasing power. The best state (Alaska) leaves $79,125; the worst (Oregon) leaves $70,932. Illinois is $4,809 behind the leader.

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